CBD Surges into Mainstream with New Products, Celebrity Endorsements and Emerging Consensus about Benefits

CannabisNewsWire Editorial Coverage: Analysts at Brightfield Group see CBD (cannabidiol) gobbling up a sizeable chunk of a projected $100 billion nutraceuticals 2022 U.S. market.

Growing CBD market could eclipse broader cannabis market
Consensus about health benefits backed by clinical work, personal endorsements lead to heightened interest
CBD found in vast array of new products

As CBD moves into the mainstream, opportunities are likely to grow exponentially for a variety of companies, including plant-based health and wellness product developer Wildflower Brands Inc. (OTCQB: WLDFF) (CSE: SUN) (WLDFF Profile). Canadian company Tilray Inc. (NASDAQ: TLRY) is riding the wave by acquiring Manitoba Harvest, the world’s largest hemp foods company. Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) recently announced it has closed a billion-dollar equity investment from an outside company. Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) just received a cultivation license from Health Canada for its facility in New Brunswick. Aphria (NYSE: APHA) (TSX: APHA) also received additional licensing approval from Health Canada, permitting the company to commence production in an additional 800,000 square feet of facilities.

To view an infographic of this editorial, click here.

An Established Wellness Ingredient Goes Mainstream

The recent passage of the Hemp Farming Act in the 2018 U.S. farm bill made hemp an ordinary agricultural commodity, swinging open the door for hemp-derived CBD. The industry is seeing everyone from A-list celebs at the Oscars to noted medical professionals such as American neurosurgeon Dr. Sanjay Gupta extolling the therapeutic benefits of CBD.

Already incorporated into to a wide variety of functional foods and beverages, CBD has also started to show up in coffee and cocktails, with specialty CBD drinks joining the menus at bars and coffee shops across America. Many users swear by the efficacy of CBD to combat ailments such as anxiety, sleeplessness or physical pain.

With mounting therapeutic credence and a raft of celebrity endorsements, its little wonder that CBD has exploded into the mainstream. Product developers have been scrambling to incorporate cannabidiol into every kind of consumer product imaginable, from health and beauty items for the skin to tasty treats for the family pet. The accumulating evidence for CBD’s health benefits also owes a great deal to watershed achievements such as Epidiolex, a CBD-derived anti-seizure medication that has been through numerous clinical trials, becoming the first FDA approved cannabis-based drug utilized to treat severe forms of childhood epilepsy.

There’s an emerging consensus among consumers that CBD has broad ranging medicinal benefits with the ability to treat something as serious as epilepsy yet also safe enough to be used for daily aches and pains or address a myriad of anxieties and ailments. This awareness, combined with the rapid proliferation of CBD consumer products ranging from vape pens to functional foods, has led to a veritable grassroots market revolution.

Any lingering stigma or confusion between CBD and THC is rapidly eroding, particularly with the likes of homemaking legend Martha Stewart now providing her knowledge of consumer products to CBD developers. And household names such as Kim Kardashian, Olivia Wilde and Jennifer Aniston are also going on record as having enjoyed the health benefits associated with their personal consumption of CBD products.

Growing Consensus about Healing Power of Plants

Grabbing A-list celebrity attention, the Wildflower Brands Inc. (OTCQB: WLDFF) (CSE: SUN) CBD+ Healing Stick was in each of the gift bags of the stars during Oscar weekend 2019. Packing 500mg of highly concentrated, full-spectrum CBD, Wildflower’s cooling and soothing stick is easy to apply for targeted pain relief and skin care, providing relief through a unique CBD blend that includes therapeutic ingredients such as arnica, wintergreen and other essential oils.

An established, respected brand, Wildflower Wellness’s overriding mission is to connect people to the healing power of plants via the company’s increasingly sophisticated line of CBD vaporizers, capsules, tinctures, soaps and topicals – formulating its extracts with essential amino acids and beneficial terpenes, the organic compounds that provide flavor and scent. A testament to the popularity of Wildflowers’ proprietary formulations can be found in a NY Magazine article “The Best CBD and Hemp Products for the Tasteful Non-Stoner” touting the company’s CBD Immunity Vaporizer, stating that, “Wildflower also made the perfect CBD starter kit…”

The company’s products are made in the United States at Wildflower’s GMP facilities, third-party lab tested and backed by a 100 percent satisfaction guarantee. Wildflower’s well-formulated, convenient and consumer conscious products such as its disposable ACHES CBD+ vaporizer are increasingly enjoying widespread acceptance, in part due to education of the consumers by cannabis and wellness influencers.

Flexing its branding and marketing muscle, Wildflower Wellness partnered with Bridges General to take that company’s reimagined convenience store concept to the next level. The partnership fuses together the immense popularity of the Bridges General design-centric retail space that delivers convenience for the on-the-go urban professional with an engaging opportunity to experience and learn about the benefits of CBD. The partnership is already serving some of the most powerful and influential people in the country at its Lower Manhattan store, as well its Madison Avenue Bridges General store. Further expanding reach, Wildflower has also engaged Retail Worx to establish shop-in-shop retail availability at more than 20 locations in the heart of New York City’s booming cannabis market.

Industry Seeing Retail Renaissance in Consumer Products

Wildflower continues to expand its impressive retail reach, with the Wildflower Wellness brand already enjoying distribution in key states, such as Washington at more than 200 retailers. The company’s California-based King Extracts brand is focused on cannabis technology and delivery systems. The company’s King Extracts product, the King Recharge, is a discreet but powerful little pocket vaporizer that comes in its own sleek charging and storage case, which has room for two 500mg cartridges and a backup battery.

King Recharge offers fractionally distilled CO2 extractions in exceptionally clean and sophisticated blends that utilize proprietary terpenes in order to deliver a full, robust flavor profile. Sativa, Indica and Hybrid, as well as two limited-edition Sativa flavors (watermelon and bubble gum), are currently available. Additionally, Wildflower’s growing national distribution arm includes over 80 other wellness and healthcare practitioners, bringing the company’s total to some 300-plus stores nationwide.

The company has even branched out into physical retail itself, harnessing the power of increasing brand recognition, a firm footing in the California market and tightly knit relationships with local hospital oncology departments and community programs. Wildflower has launched its own dispensary in Los Angeles and provides on-demand, legal and licensed cannabis delivery services to adults in the L.A. area. The second quarter of 2019 saw the 10th consecutive quarter of increased revenue for Wildflower, with $1.4 million in sales underscoring a burgeoning direct-to-consumer online channel that witnessed 300 percent growth last year alone.

Many analysts are saying that the CBD rush is just getting started. One recent estimate indicates that the CBD market alone could eclipse the entire remainder of the cannabis market combined. Wildflower is making all the right moves to capture an outsized share of the CBD bonanza.

A Rising Tide Lifts All Boats

Other companies are recognizing the potential profit CBD may provide. Canadian company Tilray Inc. (NASDAQ: TLRY) just finalized its acquisition of Manitoba Harvest, a move Tilray president and CEO called a milestone for the cannabis industry. “It builds on the strategic partnerships we have formed with consumer brand industry leaders and demonstrates our track record of disrupting the global pharmaceutical, alcohol, CPG, and functional food and beverage categories,” said Brendan Kennedy. The deal gives Tilray access to a broad portfolio of food products that are distributed in 16,000 stores across the United States and Canada, as well as the opportunity to expand beyond the food category, possibly including extracts.

Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) just closed a C$2.4 billion investment from Altria, the American company behind brands such as Marlboro and Benson & Hedges. The move is a sign of the huge interest the CBD market is generating from companies both in and outside the industry. Cronos operates two wholly owned, Canadian-licensed producers and has multiple international production and distribution platforms and partnerships across five continents. Cronos intends to continue to expand its global footprint as it focuses on building an international iconic brand portfolio and developing disruptive intellectual property. The company is committed to building industry-leading companies that transform the perception of cannabis and responsibly elevate the consumer experience.

Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) predicts the new facility in Fredericton, New Brunswick, will produce more than 5,000kg of cannabis annually, with first harvests expected to become available to the market within six months. In addition, the company expects to create more than 130 jobs at the plant. “New Brunswick has emerged as a leader in the legal cannabis sector, and the province is an excellent place to do business,” said co-CEO and Canopy Growth chairman Bruce Linton. “We will leverage our existing operational expertise to ensure we support the needs of our customers while making a meaningful contribution to the local economy primarily through new job creation.”

As part of its Part IV and Part V expansions, Aphria (NYSE: APHA) (TSX: APHA) is increasing production at its Aphria One location. The expansions brig industry-leading automation to the company. While critical phases such as initial cuttings, trimming and pruning mature plants will be performed by hand, the in-house designed technology will automate key steps, including transplanting cuttings, transplanting plans through harvesting, de-budding and rough trimming, drying and curing, and waste disposal.

With the 2018 Farm Bill thrusting hemp-derived CBD into the limelight, the broader industry likely stands to experience a rising tide that will lift all boats.

For more information on Wildflower Brands, visit Wildflower Brands Inc. (CSE: SUN) (OTCQB: WLDFF)

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Hydroponic Supplies Play Key Role in Hemp Market Growth

CannabisNewsWire Editorial Coverage: Surging hemp market growth has created huge demand for hydroponic supplies.

Demand for CBD is driving a rise in hemp cultivation, much of which is done indoors using hydroponic equipment.
This hydroponic approach allows greater quality control over the cultivation process and the hemp.
Acquisitions and expansion are needed for hydroponic companies to keep up with demand.

Hydroponic supplier Sugarmade Inc. (OTCQB: SGMD) (SGMD Profile) has been making swift moves to deal with this demand, acquiring other supply companies and outlets. Canadian company Tilray Inc. (NASDAQ: TLRY) has acquired the world’s largest hemp foods company, giving it a strong position in a customer-facing part of the sector. Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) has set up a new hemp-growing facility in New York state, using hydroponics to help it meet growing demand. Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) has received a large boost in investment thanks to interest in the surrounding sector, providing fuel for future growth. Aphria (NYSE: APHA) (TSX: APHA) is looking beyond North America, with the acquisition of a European distributor.

To view an infographic of this editorial, click here.

A Better Way to Grow Hemp

With the passing of the Farm Bill in December, the production of hemp for CBD, which was already on the rise, looks set to soar in the United States and beyond. Demand for CBD for health and wellness products keeps rising as more research focuses on its potential for relaxation, pain management and other benefits for living a healthy life. Farmers are grabbing the opportunity to invest in a new cash crop, one which has provided remarkable returns for some.

But all this attention on hemp and CBD brings challenges with it. This is a tightly regulated sector with demanding customers. High-quality crops are essential for success, and managing both quality and consistency can prove incredibly challenging. To do this, many growers are turning to hydroponics.

Hydroponics and Hemp

Hydroponic equipment offers an alternative approach from growing plants in soil. Instead, the hemp harvest is grown in solutions rich with sustaining minerals, with roots either suspended directly in the liquid or supported by a medium like gravel that the liquid can move through. Provided by specialist companies such as Sugarmade Inc. (OTCQB: SGMD), hydroponic systems give growers more control over how their plants grow.

This approach can help hemp growers in a number of ways. The most obvious benefits revolve around the fact that the plants are grown in clean, indoor environments. While this results in higher costs compared with growing in fields, it also results in a number of benefits. Plants are safe from changes in the weather that can be harmful to many crops, such as sudden frosts or unseasonal heat. They’re also protected from contaminants, both living and inanimate, and from infections that could kill the plants to chemicals carried in the atmosphere that could taint the eventual crop.

While any indoor growing situation can help with this, hydroponics brings greater advantages. By feeding plants with carefully balanced nutrient baths instead of soil and fertilizer, farmers gain more control over the crops they produce. This means higher CBD content, making their plants more valuable. Hydroponics also means that the hemp often more easily passes the stringent quality tests that are applied to plants in this sector, tests that are likely to become even firmer now that the federal government is officially allowing and regulating hemp production in the United States.

As a result, companies such as Sugarmade are on the brink of a potential new gold rush. With some companies moving into the CBD market and others rushing to expand their existing hemp production, demand for hydroponic supplies is on the rise.

Acquiring Influence

This has created a great opportunity for hydroponic suppliers, and some are moving to further strengthen their position. Those with an eye to the future, such as Sugarmade, were making preparations long before the Farm Bill passed into law. Now they’re reaping the benefits of that forward thinking.

As with hemp production, consistency is key to the supply of hydroponic equipment. Customers are reliant on these companies not only for setting up their growing spaces but for expanding them, maintaining and replacing equipment, and ensuring a steady supply of the minerals needed to feed the plants. A company that can’t provide consistent supplies will struggle to maintain relationships with its customers, whose crops rely on that supply line. With demand growing, it’s harder to ensure supplies, and for many, the answer is expansion.

This is the approach that Sugarmade is taking. The company has made an agreement to acquire Sky Unlimited LLC, a California-based distributor of cultivation supplies. This will allow Sugarmade to meet more demand than it has previously faced, and so cope with the increased needs of customers.

“This year, Sky Unlimited and its associated operations are expected to produce in excess of $40 million in revenues with profitability and positive cash flow,” Jimmy Chan, CEO of Sugarmade,said in late 2018. “This new revenue stream combined with our recently upwardly guided revenue forecast of $30 million for next year will make Sugarmade one of the largest publicly traded suppliers to the booming cannabis cultivation marketplace, with a combined revenue forecast for next year in excess of $70 million.”

There’s also an opportunity for expansion, given the huge market growth. Sugarmade has leapt upon this chance through its possible acquisition of a retail location from Washington State-based company Hydro4Less and options to purchase two more. The first location alone is expected to provide $5 million in revenue, as Sugarmade increases its foothold in the hydroponic market.

Hydroponics Beyond North America

While the current focus for hemp and CBD, as well as the associated part of the hydroponics market, is currently on the North America, there is also important potential for growth further afield. European countries are showing an increasing interest in CBD products, with customers keen to buy in, and some governments re-examining the legislation around these crops. For fast-moving companies, there’s a chance to get in on the ground floor of the next wave of hemp hydroponics.

Sugarmade is ahead of the game in this area. Last summer, the company made its first sales into Europe, establishing a place in the continent’s supply chain. European customers have been taking an increasing interest in the quality products and attractive prices provided by American hydroponic companies, and Sugarmade is making the most of it.

“The lack of available products within the European markets provides Sugarmade additional revenue growth opportunities,” Chan said. “We view this as a potential growth market for Sugarmade especially considering there are more than 740 million people in Europe compared to only about 360 million in the U.S. We believe even a few points of market share of this huge market will have a very positive effect on our growth rate.”

Companies Race for Hemp Dominance

Like Sugarmade, Canadian company Tilray Inc. (NASDAQ: TLRY) has been using acquisitions to strengthen its place in the hemp and adjacent markets. One of the most significant is the recent acquisition of Manitoba Harvest, the world’s largest hemp foods company. Food and drink are increasingly important parts of the hemp market, as customers look for hemp-based whole foods and tasty ways to consume CBD. With a range of products including oils, granola, and protein powder that are sold in more than 16,000 major retailers, Manitoba Harvest gives Tilray a powerful place in this sector.

Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) is one of the largest companies working in hemp, thanks to its steady growth paired with billions of dollars in outside investment. The company is in the process of expanding from Canada into the United States, with the establishment of a hemp production facility in New York state. Growth into the States will allow Canopy Growth to benefit from this year’s CBD surge. The company is also working to raise the public profile and usefulness of CBD through research with the NHL on using CBD to treat concussions.

Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON), one of the big companies making use of hydroponic equipment, has benefited hugely from outside interest in the market. Less than a month ago, it closed a C$2.4 billion investment from Altria, the American company behind brands such as Marlboro and Benson & Hedges. It’s a sign of the big money currently swirling around this part of the economy, a large part of which is invested in crops and the equipment to grow them.

Some of this big money was recently directed into an attempted hostile takeover of Aphria (NYSE: APHA) (TSX: APHA) by Green Growth Brands. It was a move that showed the high value placed on companies such as Aphria, even as the company’s board shot down the bid. Like Sugarmade, Aphria has been making moves beyond North America and into Europe, with the acquisition of a German distributor.

The hemp and CBD market keeps growing, more money keeps flooding in, and a large part of it will inevitably be funneled into hydroponics to create plants that meet the standards demanded by customers and regulators. For both CBD companies and hydroponic suppliers, that’s great news.

For more information on Sugarmade, visit Sugarmade, Inc. (OTCQB: SGMD)

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Staggering Growth Predicted for CBD Industry as Impact of Farm Bill Seen

CannabisNewsWire Editorial Coverage: Following the passing of the 2018 Farm Bill, CBD sales have continued their massive growth in the United States and beyond.

Cannabidiol (CBD), a chemical found in cannabis, has seen a huge growth in sales over the past few years.
CBD can be derived from hemp, and the passing of a new farm bill in the States makes this form of cultivation legal at a federal level.
This forms part of wider growth in the cannabis market, as companies expand their operations in North America and even beyond.

Wildflower Brands Inc. (OTCQB: WLDFF) (CSE: SUN) (WLDFF Profile) is among the companies benefiting from this market, with an increase of more than 300 percent in online sales for its CBD products last year. Tilray Inc. (NASDAQ: TLRY) is expanding with its acquisition of hemp foods company Manitoba Harvest. Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) announced revenue for its fiscal third quarter rose more than 280 percent compared to a year ago. In December, Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) announced that tobacco company Altria would be taking a $1.8 billion stake in the company. And Aphria (NYSE: APHA) (TSX: APHA) has just completed expansion projects that allows it to substantially increase its output.

To view an infographic of this editorial, click here.

CBD Drives Growth for Hemp

Hemp, a plant that has long been out of the public eye, is returning to the spotlight in a big way. A nonintoxicating form of cannabis, hemp was primarily used for centuries as a natural source of fibers, which were used in cloth, rope and even building materials. Many ships in the great age of sailing relied on hemp for their riggings.

But in the sweeping anti-drug crusades of the 20th century, hemp became caught up in attacks on cannabis. Campaigners who were determined to save consumers from their own pleasures had cannabis outlawed at a time when there was little effective way of distinguishing between hemp and other forms of cannabis. No longer needed for cloth and rigging, hemp was made illegal.

Now all that has changed — nowhere more dramatically than in the United States of America.

The Farm Bill

Hemp is making a comeback thanks to the growing popularity of cannabidiol (CBD), an active ingredient found in many forms of cannabis. It’s an ingredient that companies such as Wildflower Brands Inc. (OTCQB: WLDFF) (CSE: SUN), a creator of plant-based health and wellness products, have been making extensive use of in recent years. Combined with other naturally occurring plant compounds, full-spectrum CBD is used in a range of Wildflower products, including capsules, topicals, soaps, tinctures and vaporizers.

Until recently, the production of CBD in the United States faced serious restrictions and uncertainties. Many states had legalized the production of cannabis in some form, either for medical or for recreational use. In addition, there were licensed trials of the cultivation of hemp, which can be rich in CBD. But all of these plants were illegal at a federal level, meaning that even with state-level approval, cultivators faced financial limitations and the threat of government action.

All that changed in December with the passage of the 2018 Farm Bill. One of a regular series of bills governing the U.S. agricultural sector, this bill removes hemp from the list of controlled substances, making it unambiguously legal for farmers to grow hemp. This changes the landscape for CBD products in the States. Companies such as Wildflower, which has already got its products into many outlets in the health and wellness sector, will be able to expand their reach even further.

States have the right to set their own rules around restricted substances, and some states have taken an unsympathetic attitude to CBD. The Farm Bill doesn’t force states to change this attitude, but there are already signs that public opinion on all levels are changing. The regulations in many states assume adherence to the federal guidelines, and some states, such as Alabama, have already softened their stance since the Farm Bill became law.

Under the Farm Bill, hemp production will be tightly regulated. Most states already have existing regulations in place, and the U.S. Department of Agriculture will be developing its own regulations as well. But for an established company such as Wildflower, which already works in California, Washington and New York, this shouldn’t be a problem.

Cannabis companies are accustomed to working in a tightly controlled environment and meeting the legal standards set by state legislators, as well as the product standards required by retail outlets. In that context, working within new federal regulations shouldn’t present a significant challenge, while the existence of consistent national standards will create opportunities for growth.

CBD Demand Grows

The Farm Bill has been driven in large part by the growing demand for CBD. An obscure and seldom discussed chemical a decade ago, CBD has emerged as an important consumer product. The gradual legalization of cannabis and research into its medical effects drew attention to the fact that those benefits were not all related to THC, the psychoactive chemical that gets cannabis users high. Identified as a chemical with great potential for health and wellness, CBD has started to be marketed in its own right and is used in products such as the Wildflower Wellness line.

Public interest in CBD has grown seemingly from nowhere. Tapping into interest in both cannabis and natural remedies, and offering treatments that may succeed where others have failed, CBD sales have soared. Hemp-derived CBD alone was a $390 million market in 2018 and is expected to reach $1.3 billion by 2022. And that doesn’t even include all the CBD products derived from other forms of cannabis.

The results for producers have been staggering. Wildflower saw its online sales grow by more than 300 percent in just nine months in 2018. In response, the company opened its first New York retail store, a sure sign of a product’s popularity in an age when so many companies are shedding their brick-and-mortar presence.

Looked at globally, CBD is in even better health. The Brightfield Group has estimated that CBD’s value will reach $5.7 billion this year and $22 billion by 2022. While research on the topic is still in its infancy, there is growing evidence that CBD could be used to treat a number of ailments, including certain extreme forms of childhood epilepsy. Even the United Kingdom, a country whose government remains staunchly opposed to the legalization of cannabis, has allowed the use of a CBD drug for this purpose.

Companies producing and selling CBD products are springing up across North America, Europe and beyond. Demand is growing, especially among millennials. That’s bolstering the impressive sales of companies such as Wildflower and putting pressure on politicians to further liberalize the laws around hemp.

Making the Most of a New Market

A lot of companies are now making the most of the growing popularity of cannabis, CBD and hemp. With its acquisition of Manitoba Forest, Tilray, Inc. (NASDAQ: TLRY) is tapping into an extensive U.S. distribution network and an upcoming line of CBD products. Manitoba Harvest sells hemp-based granola, protein powder, milk and other food products at more than 13,000 points of sale across the United States.

Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) impressive increase in sales was boosted by the company’s first sales of legal recreational marijuana in Canada, which accounted for more than 70 percent of gross revenue. Chairman and co-CEO Bruce Linton attributed the lift to the company’s decision to make early, “meaningful” investments that helped it corner a big part of the Canadian market when the law took effect. Canopy Growth is a world-leading diversified cannabis and hemp company, offering distinct brands and curated cannabis varieties in dried, oil and softgel capsule forms.

Cronos Group, Inc. (NASDAQ: CRON) (TSX: CRON), which became the first marijuana stock to uplist from the over-the-counter exchange to a major U.S. exchange, appears poised to benefit from its move with Altria. Altria now has a 45 percent stake in Cronos, with the ability to exercise warrants it also received to boost its stake up to 55 percent. Should those warrants be exercised, Cronos would receive an additional $1.05 billion. Cronos Group is a globally diversified and vertically integrated cannabis company with a presence across five continents. Cronos Group operates two wholly-owned Canadian licensed producers: Peace Naturals Project Inc., which was the first non-incumbent medical cannabis license granted by Health Canada, and Original BC Ltd., which is based in the Okanagan Valley, British Columbia.

Aphria (NYSE: APHA) (TSX: APHA) recently announced that Health Canada has granted the company its license amendment, permitting Aphria to commence production in an additional 800,000 square feet of facilities at its Aphria One location, as part of the company’s completed Part IV and Part V expansions. Headquartered in Leamington, Ontario – the greenhouse capital of Canada – Aphria has been setting the standard for the low-cost production of safe, clean and pure pharmaceutical-grade cannabis at scale, grown in the most natural conditions possible.

Savvy companies, such as Wildflower Brands Inc., are making the most of legal moves in the United States and Canada that have created momentum and exciting opportunities for growth.

For more information on Wildflower Brands, visit Wildflower Brands Inc. (CSE: SUN) (OTCQB: WLDFF)

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Hemp Boom Leads to Cultivation Supply Shortages

CannabisNewsWire Editorial Coverage: The growth of the hemp sector is having a beneficial effect for both hemp companies and hydroponic suppliers.

The growth of hemp more than doubled in the United States last year
More companies are moving to produce hemp, causing a surge in demand for cultivation and hydroponic supplies
Shortages are particularly acute relative to the hemp micropropagation and hemp cloning supplies as the spring planting season looms

Sugarmade Inc. (OTCQB: SGMD) (SGMD Profile) via its pending acquisitions is poised to accelerate its growth rate as a result of this hemp cultivation boom, along with other leading companies. Tilray Inc. (NASDAQ: TLRY) has been expanding through the acquisition of other companies and a move into Europe, with a successful harvest in Portugal. Canopy Growth Corp. (NYSE: CGC) (TSX: WEED) is using outside investment to expand from Canada to New York and to develop CBD-infused drinks. Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) has also seen substantial outside investment thanks to growing faith in hemp. Aphria Inc. (NYSE: APHA) (TSX: APHA) has even faced a hostile takeover attempt as some companies look for ways to force their way into greater influence over a growing sector.

To view an infographic of this editorial, click here.

Hemp — The New Cash Crop

This year is set to be a record breaker for the hemp industry. The ongoing transformation of the plant’s legal status in North America is opening up possibilities for farmers, processors and retail outlets. The whole playing field is changing as the nationally legalized Canadian industry develops and the United States contemplates an agricultural future with now-legal hemp cultivation. This momentum appears to be drawing in big investors as well as industry pioneers that are intent on setting up new businesses.

The Farm Bill, which was signed into law in the United States in December, includes clauses making the farming of hemp legal on a nationwide level. Hemp doesn’t contain a significant quantity of the psychoactive chemical tetrahydrocannabinol (THC), which is present in other variations of the plant. Instead, hemp is valued for its nonpsychoactive chemical cannabidiol (CBD), which is used in a growing number of health, wellness and relaxation products. Hemp also is a source for fibers that can be used for anything from cloth to building materials. The bill therefore has made it far easier for farmers, many of whom are struggling to get by on current crop yields, to look for profits through the hemp sector.

Even before the Farm Bill’s passage, the expansion of hemp cultivation in 2018 had been staggering, growing from 25,713 to 78,176 acres spread across 23 states. Those states issued 3,546 hemp licenses in 2018, more than double the 1,456 issued in 2017. Since the law passed, states with existing hemp infrastructure have been overwhelmed with applications for licenses, and it’s clear that the growth should stay strong.

With Growth, Shortages Loom

Like any dramatic development in the economy, this emerging sector brings with it challenges and difficulties. One of these is providing the cultivation supplies that new and expanding hemp growers will need. Shortages of critical cultivation supplies, particularly relating to plant tissue micropropagation and cloning are being reported potentially threatening the plans of many farmers to get their hemp crops planted this spring. But one person’s challenge is another person’s opportunity, and in this case, the opportunity will go to companies that have prepared for the growing need for cultivation supplies.

This young hemp cultivation supplies industry is not dominated by established corporate giants, which leaves plenty of space for relative newcomers such as Sugarmade Inc. (OTCQB: SGMD), via its pending acquisitions.

Generating New Revenue Streams

Recently, Sugarmade announced its intention to acquire Sky Unlimited LLC, which is a major supplier to large commercial agricultural cultivation operations. The acquisition is anticipated to generate new revenue streams from not only large hemp growers but also from more traditional hydroponic oriented cultivators.

The acquisition of Sky Unlimited and its www.AthenaUnited.com marketing website has been almost perfectly timed to make the most of the boom hemp cultivation trend. The brands fit well with Sugarmade’s existing business, allowing the company to smoothly expand its hydroponic sales operations and better meet growing customer needs.

Profiting from Supply and Demand

Acquisitions have also been the order of the day for many hemp cultivators, allowing them to expand their operations into newly legalized spaces.

Canadian company Tilray Inc. (NASDAQ: TLRY) has been on an expansion spree, setting up Tilray Latin America SpA to reach Latin American markets, acquiring Canadian rival Natura Natural Holdings Inc., and recently adding the world’s largest hemp foods company, Manitoba Harvest, to its roster. While the Americas currently offer the largest markets for the plant, Tilray also has an eye on future markets. The company is rapidly expanding its operations in Europe.

The growth of the hemp sector has drawn interest from other industries — most notably in the form of a $4 billion investment in Canopy Growth Corp. (NYSE: CGC) (TSX: WEED) by Constellation Brands. This sees the U.S. beverage manufacturer looking for fresh markets to profit from as the two companies collaborate on developing CBD-infused drinks. One of Canada’s largest hemp cultivators, Canopy Growth has used this influx of cash to support its own expansion plans. It is spreading across the border to set up a hemp production facility in New York State. It is also bolstering hemp’s status as a health drug through work with the National Hockey League on the potential use of CBD in treating concussions.

Another of the big Canadian players, Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) has also drawn interest and investment from south of the border. The company announced March 8 that it had closed a C$2.4 billion investment from Altria, the owner of such famous brands as Marlboro and Benson & Hedges. Like the Constellation Brands investment, this move shows the wider business world’s faith in the enduring power of hemp as a consumer product and the viability of the companies producing it.

The heated competition in the hemp market is reflected in the recent attempt by Green Growth Brands to achieve a hostile takeover of cannabis company Aphria (NYSE: APHA) (TSX: APHA). A company with interests in North American, Latin America and Europe, Aphria’s board has rejected the takeover and encouraged shareholders to do the same. This reflects the company’s faith in its own value and the profit potential of the coming year.

Like other companies in the cannabis sector, Sugarmade has announced a host of acquisitions over the past year, which it is currently working to close. With these, the company holds the potential to generate up to $90 million in annualized revenues, which could make Sugarmade one of the largest suppliers in this booming industries.

For more information on Sugarmade, visit Sugarmade, Inc. (OTCQB: SGMD)

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Sector ETFs Provide Diversified Entry Point for Fast-Moving Industries

CannabisNewsWire Editorial Coverage: Individuals hoping to gain exposure to the movement of the markets have two primary options: spend a lot of time and effort researching public companies, or put faith into a fund. A solid investment strategy is key to keeping pace with inflation and reaching your financial goals, but the significant risk and volatility that can come with investing in a small group of companies is a real turn-off for most part-time investors.

Increasingly, novices and seasoned traders alike are turning to mutual funds for their stability and ease of use. According to data from the Investment Company Institute, mutual funds were the most common type of investment company owned in 2018, with 44.8 percent of U.S. households owning shares of mutual funds or similar U.S.-registered investment companies – including exchange-traded funds (ETFs), closed-end funds and unit investment trusts. As Matthew P. Fink notes in The Rise of Mutual Funds: An Insider’s View, “Today U.S. mutual funds are the largest financial industry in the world, with over 88 million shareholders and over $11 trillion in assets.”

Index vs Actively Managed Funds

Deciding on a mutual fund can be tricky. Data from Morningstar, published in 2018, indicates that the number of mutual funds and ETFs now stands at more than 10,000. You can begin to narrow this total down by exploring the differences between index funds and actively managed funds.

Index funds aim to track the performance of a specific market benchmark as closely as possible. The Vanguard 500 Index Fund is a prime example, with its holdings consisting of weighted positions in S&P 500 companies. Although investment firm Vanguard suggest that “only about 16 percent” of investments in domestic mutual funds are in index-based options, these funds have some noteworthy proponents.

In 2007, American business magnate Warren Buffett made a $1 million bet with Protégé Partners claiming that hedge funds wouldn’t outperform an S&P index fund, and he won. As reported by CNBC, Buffett’s choice investment, the Vanguard 500 Index Fund, “returned 7.1 percent compounded annually, while the basket of hedge funds his competitor chose returned an average of only 2.2 percent.”

Unlike index funds, actively managed funds rely on the skill and insight of their managers to not just match the performance of the larger markets, but beat them. History shows these funds to be considerably less consistent than their index-focused counterparts. According to Standard & Poor’s, roughly three-quarters of actively managed domestic stock funds underperformed the S&P 1500 Total Market Index in the decade ended June 30, 2015. Additionally, 40 percent of actively managed equity funds available to investors on June 30, 2005, were no longer in existence just 10 years later.

While exceptions do exist (Fidelity Blue Chip Growth has outperformed the S&P 500 by 2.8 percent over the past decade, for example), the upside and relative stability of index funds make them worthy of consideration for risk-averse investors.

Alternative Indexes

The upside of major indexes like the S&P 500 are apparent, but investing solely in the performance of the larger market can limit your exposure to faster-moving investment opportunities. Consider, for example, the cannabis industry. According to Marijuana Business Daily, legal cannabis sales in the U.S. alone were on pace to grow by nearly 50 percent in 2018 to $9.7 billion, with legal sales expected to rocket past $22 billion by 2022.

The Prime Alternative Harvest Index (“Prime”) gives fund-focused investors an opportunity to cash-in on the expanding repeal of cannabis prohibition without digging through the mountain of fly-by-night entries to the space. The Prime aims to take advantage of both event-driven news and long-term trends in the cannabis industry, as well as the industries likely to be influenced by the medicinal and recreational cannabis legalization initiatives that are taking shape in many forms around the globe. Utilizing a modified market cap weighting scheme, the index features some of the fledgling cannabis industry’s most recognizable names, including GW Pharmaceuticals (NASDAQ: GWPH), Cronos Group (NASDAQ: CRON) (TSX: CRON) and The Green Organic Dutchman Holdings Ltd. (TSX: TGOD) (OTCQX: TGODF), alongside a roster of established upstarts and ancillary companies defined by a set prospectus.

The Benefit of Exchange-Traded Funds

When investing in a fund based on a more fluid index like the Prime, the benefits of exchange-traded funds over more traditional mutual funds are particularly noteworthy. While traditional open-end mutual fund shares are only traded once per day, limiting your ability to capitalize on sudden market moves, ETFs are bought and sold during the day just like stocks, opening the door for short selling, futures and options.

ETFMG Alternative Harvest (ARCA: MJ) is an ETF that tracks the Prime in an effort to “measure the performance of companies within the cannabis ecosystem benefitting from global medicinal and recreational legalization initiatives.” To date, it is the first and only U.S. ETF to target the cannabis industry, providing direct exposure to the ongoing “green rush” taking place across North America and around the world.

The Alternative Harvest ETF turned its focus to the cannabis space in late 2017, shifting away from a prior basis of Latin American real estate to invest in both cannabis cultivation firms and a few outside operators that you may not expect to see in a cannabis-centric fund, such as Philip Morris International (NYSE: PM) and Scotts Miracle-Gro (NYSE: SMG).

Importantly, the ETF requires that all holdings have a minimum market cap of $200 million, giving investors a degree of insulation from the marijuana penny stocks and upstart companies that continue to flood the sector.

A Closer Look at the Alternative Harvest ETF

Since rebalancing its holdings to focus on the cannabis space, the Alternative Harvest ETF has established a strong position on the radars of investors eying the industry. In early January 2018, The Motley Fool issued a report stating that MJ was bought and sold more than the $145 billion iShares Core S&P 500 ETF, which the publication touted as a testament to “just how big [MJ] has become in marijuana stock circles.” In the year-plus since that report was issued, interest in the cannabis-focused ETF has remained strong, with current average trading volume exceeding 900,000.

Throughout the first two months of 2019, the sustained interest in MJ has been supported by its upward trajectory. Entering the year with a market price of $26.42, the fund’s YTD return clocks in north of 40 percent, with a market price of $37.43 during mid-day trading on March 5 that marked a new high for 2019.

This strong performance lines up nicely with the broader cannabis sector, which is supported by MJ’s current asset holdings. Canadian shares of The Green Organic Dutchman, for example, which currently represent 4.34 percent of MJ’s portfolio, are up more than 60 percent YTD. Similarly, U.S.-listed shares of Canopy Growth Corporation (TSX: WEED) (NYSE: CGC), which make up 7.16 percent of MJ’s current holdings, are up roughly 63 percent YTD. Canadian shares of OrganiGram Holdings Inc. (TSX.V: OGI) (OTCQX: OGRMF) make up 3.35 percent of MJ’s current holdings, and they’re up more than 60 percent YTD, as well.

The impressive YTD performance of MJ’s smaller holdings, including The Supreme Cannabis Company Inc. (TSX: FIRE) (OTCQX: SPRWF), Canopy Rivers Inc. (TSX.V: RIV) (OTC: CNPOF) and VIVO Cannabis Inc. (TSX.V: VIVO) (OTC: VVCIF), each of which makes up less than 1 percent of MJ’s current portfolio, continues to highlight the current opportunity presented by the North American cannabis industry. The Canadian shares of each of these companies are up more than 40 percent YTD.

After a turbulent 2018 for the cannabis industry, the first quarter of 2019 has shown incredible promise for established operators throughout the space. In early January, The Motley Fool forecast huge growth for a number of companies currently included on the Prime Alternative Harvest Index and held by MJ, including 407 percent sales growth for Aphria (NYSE: APHA) (TSX: APHA), 440 percent sales growth for The Supreme Cannabis Company, 891 percent sales growth for OrganiGram Holdings and 930 percent sales growth for cannabinoid drug maker GW Pharmaceuticals, whose shares currently represent 9.1 percent of MJ’s total holdings.

A Diversified Entry Point

It’s easy to be drawn to the cannabis sector for its promise of significant growth in the coming years, particularly as legalization measures continue to gain steam in the United States. However, choosing a winner in this nascent market has already proven to be both difficult and risky for investors of all skill levels. A proven way to avoid backing the wrong horse in this great green race is to diversify your investment, focusing more on the overall success of the industry than on that of any individual company or management team.

With more than 86 percent of its current holdings providing exposure to U.S. and Canadian markets and broad industry focuses spanning pharmaceuticals, tobacco and biotechnology, the Alternative Harvest ETF provides an intriguing and diversified entry point for investors seeking a foothold in the continued emergence of the legal cannabis industry.

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Vertical Integration Offers Profit Potential within Growing Cannabis Industry

CannabisNewsWire Editorial Coverage: As the cannabis industry continues its impressive growth, acquisitions are leading to greater vertical integration.

Companies within the cannabis sector are acquiring other organizations to benefit from valuable specialist knowledge and skills.
Such deals allow vertically integrated value chains, as have also been applied in industries such as coffee production.
This comes amid wider growth in the sector, which is drawing substantial outside investment.

Youngevity International Inc. (NASDAQ: YGYI) (YGYI Profile) is following the vertically integrated model, having recently acquired a company specializing in cannabis processing machinery. Tilray Inc. (NASDAQ: TLRY) is expanding its Canadian production facilities through the acquisition of another grower. Budweiser brewer Anheuser-Busch Inbev (NYSE: BUD) (OTC: BUDFF) has partnered with Tilray to produce cannabis-infused drinks. In addition, tobacco companies are investing in the sector, providing extra funds for companies such as Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON). Specialist companies such as cannabis real estate finance company Innovative Industrial Properties Inc. (NYSE: IIPR) are also looking for entry positions in the industry.

To view an infographic of this editorial, click here.

Cannabis Companies Turn to Vertical Integration

As the global cannabis industry continues to grow — with North America taking a leading role — companies are eager to find ways to improve their productivity and stand out from the pack. A wide range of companies covering the production, processing, marketing, and sales of cannabis and cannabidiol (CBD) products are vying for a position in the space. So, what can give a company an edge?

Many are turning to vertical integration. By bringing together production, processing and distribution, companies can cut costs, improve efficiency and ensure quality control. It’s a strategy that has worked well in other parts of the economy, but can it work for cannabis?

Acquisitions for Growth

This all-under-one-roof strategy is definitely one that the management at Youngevity International, Inc. (NASDAQ: YGYI) believes in. A leading omni-directional lifestyle company, Youngevity has recently moved into the cannabis sector through investment in CBD.

CBD is one of two significant active ingredients found in cannabis. Unlike THC, which until a few years ago was the best-known of these chemicals, CBD is not psychoactive and does not deliver the highs or mental impairment that comes with THC. In addition, recent research has indicated that CBD could have a wide range of beneficial effects for health and well-being, leading to a burgeoning market for CBD products. This promising research, along with a growing popular acceptance of cannabis, has led to a resurgence in the growth of hemp — a variety of cannabis that can be rich in CBD but low in THC — and hemp-based products.

Youngevity entered this market last summer, with the launch of its Hemp FX product line, which includes products designed to soothe muscle pain and help consumers relax. This has provided a new product offering for a company that has already seen success with its hybrid model of direct selling, social selling and e-commerce.

To expand upon this opportunity, Youngevity has recently acquired Khrysos Global, a large hemp and CBD machine manufacturing company. Khrysos’s proprietary technology has been developed specifically to extract active ingredients from hemp and cannabis in order to provide the best possible yields from crops. The company also provides planning and consulting for cannabis companies looking to make use of technology in the extraction process.

“Our acquisition of Khrysos is extremely exciting on a number of levels,” said Youngevity CEO Steve Wallach. “Beyond the fact that Khrysos’ hemp-CBD extraction technology is far more efficient than most anything else on the market, we’re acquiring a turnkey business model here. Their systems are applicable to the entire industry and are immediately implementable across our own line of HempFX products as well as in offtake agreements we have through our existing business relationships. We see this as providing not only immense value to our company, but also to our investors–by selling not just the extraction systems, but also servicing and operating those systems via a rental model, they will provide us with continuous, ongoing profitability.”

Field to Finish

The acquisition is a natural move for Youngevity, not just because of the company’s interest in the hemp market but because of its established business model. This model, which the company refers to as “field to finish,” has been tested and proven through its CLR Roasters subsidiary.

CLR is invested in every stage in the coffee production process, from farming and green coffee distribution to roasting and sales of branded goods. Its vertically integrated model includes a plantation and dry-roasting facility in Nicaragua, established U.S. facilities and sales networks, and its own coffee brand. This comprehensive approach allows the company to control the entire process of coffee production from the field to the consumer’s cup, not only providing profit at every stage but ensuring the quality and the reputation of the company’s own products.

The acquisition of Khrysos and a 20 percent ownership stake in the Carolina Cannabis Company will allow Youngevity to establish a similar model in the cannabis sector. By taking ownership of the production, processing, branding and sales of CBD products, the company plans to profit from every stage in the process and ensure that its products are produced both efficiently and to the highest standards.

The acquisition brings the skills and experience of Khrysos’s technical and managerial staff in house at Youngevity, another critical advantage. The cannabis sector is still in its early days, and companies are regularly refining their processes the industry continues to evolve and grow. Having specialist knowledge about the equipment used in processing cannabis can only help the Youngevity optimize its processing systems, ensuring efficient manufacturing and a smooth supply chain.

Like any business savvy acquisition, this deal stands to benefit both the purchasing company and the one it is taking over. Youngevity’s scale and experience in reaching customers is designed to allow Khrysos’s technology to reach a wider market. Being part of a larger company provides an opportunity for Khrysos to expand, scaling up its equipment and advisory business.

“This is an exhilarating time for us,” said Dave Briskie, president and CFO of Youngevity. “This is just the first step Youngevity plans to take as we look to continue developing in the hemp-derived CBD industry. Right now, that industry is expanding so quickly that companies are struggling to keep up with demand. So acquiring the production capabilities of Khrysos, and adapting a creative model that allows us to upscale the usage of its technologies across our own properties and the properties of our partners — I feel — really stakes our claim within the industry at large.”

An Industry Expanding

Youngevity’s work represents only one part of a broader wave of expansion for the cannabis industry.

Canadian cannabis company Tilray Inc. (NASDAQ: TLRY) is among those using acquisitions to fuel growth. Tilray recently announced the pending acquisition of Natura Natural Holdings Inc., another Canadian company. Valued at C$70 million, this deal will increase Tilray’s growing space by 662,000 square feet, a significant expansion in an industry based around self-contained indoor agricultural facilities. An innovator in the cultivation, production and distribution of cannabis products, Tilray has has also established subsidiaries and affiliates in Europe, the Pacific, and Latin America, the latter through the recent establishment of Tilray Latin America SpA.

Like Youngevity, other companies with experience outside cannabis are now making moves into the sector. Anheuser-Busch Inbev (NYSE: BUD) (OTC: BUDFF), the brewers of the iconic Budweiser beer, is the latest in a series of beverage companies to make this move. The company has created a partnership with Tilray to explore the potential of cannabis and CBD-infused drinks. It’s a substantial deal, with each company planning to invest $50 million in the venture, and though it will initially be limited to the Canadian market, if the venture proves successful, the potential to grow in the Unites States is significant.

Tobacco companies are an obvious fit for the cannabis sector, which could provide them with an alternative revenue stream as health-conscious consumers turn away from tobacco. Altria, the company behind such famous brands as Marlboro and Benson & Hedges, has invested C$2.4 billion in Canadian cannabis company Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON). Canada is a good starting place for a company entering the cannabis market, thanks to the legalization of recreational cannabis in the country last October, but the investment in Cronos represents a broader opportunity. With business in Latin America, Europe, Australia and Israel, Cronos will provide Altria with access to a global cannabis market.

As well as attracting big players from the wider economy, the growth of the cannabis industry has supported the emergence of specialist companies within the sector, such as Innovative Industrial Properties Inc. (NYSE: IIPR). Founded in December 2016, Innovative Industrial Properties is a pioneering real estate investment trust that provides real estate capital for the medical cannabis industry. The illegality of cannabis at a federal level in the United States has made it hard for companies to acquire regular sources of funding, such as bank loans when buying property for cannabis production. There is therefore a substantial market for the company’s funding, and an opportunity for both sides to profit from such finance.

The growing cannabis market has produced companies specializing in many different areas. By bringing these specialties together, vertically integrated companies have a chance to increase profits and profit from this remarkable growth.

For more information on Youngevity, visit Youngevity International, Inc. (NASDAQ: YGYI)

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Outside Investment, New Technology Support Growing Cannabis Industry

CannabisNewsWire Editorial Coverage: Revolutionary innovations and advancements within the cannabis industry are drawing significant investment from big corporations.

Technology currently in development will make it easier to consume active ingredients in cannabis.
Advances have attracted investment for the technology’s use in tobacco as well as cannabis.
These improvements could move consumers to healthier forms of consumption than smoking.

Lexaria Bioscience Corp. (CSE: LXX) (OTCQX: LXRP) (LXRP Profile) has benefited from recent investment by Altria to support its innovative research and design work. Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) has received substantial investment from a beverage company, which will support the development of cannabis drinks. Within the sector, Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB) is in the process of acquiring an organic grower. Outside investment is bolstering Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON), a cannabis company with global reach. And another innovator, GW Pharmaceuticals Plc (NASDAQ: GWPH) (OTC: GWPRF), has run successful trials on a new drug to tackle a form of childhood epilepsy.

To view an infographic of this editorial, click here.

Finding Funds for Cannabis

The quest for finance is important in any industry, but for cannabis businesses, which are going through a period of impressive growth thanks to legal and social changes, this need for money is particularly time sensitive. Those who find substantial funding now may be in the best position to expand in the growing market.

Only a select few companies in the cannabis industry have successfully attracted capital from — and built relationships with — Fortune 500-type corporations. Though cannabis is growing, the sector is still relatively small compared with those big names, and the perceived reputational issues can be a deterrent. Even among cannabis companies that have drawn big money, few have established a partnership allowing them to retain control, much less receive money in return for license rights and minority ownership in a subsidiary. Instead, most of these companies aim to be bought out by bigger businesses.

But there have been exceptions.

A Better Deal for a Cannabis Company

Lexaria Bioscience Corp. (CSE: LXX) (OTCQX: LXRP) is an example of one company that has built a big funding deal on its own terms.

Biotech company Lexaria is perhaps most known for its DehydraTECH technology, a revolutionary system for processing molecular compounds to make them more suitable for human consumption. Applicable to molecule such as THC and cannabidiol, the active ingredients in cannabis, the technology makes these compounds taste better, increases the body’s ability to absorb them, and speeds up their impact on the body. Together, these changes can increase the efficacy of both medical and recreational drugs.

To provide the funding for further work on this technology, Lexaria has struck a deal with industry giant Altria, which will cover the use of DehydraTECH to deliver nicotine.

The milestone deal is between Lexaria Nicotine LLC, a wholly-owned subsidiary of Lexaria, and a subsidiary of Altria, Altria Ventures Inc. Under the terms of the agreement, Altria will initially provide $1 million of finance towards a Lexaria research and development program, with the option for funding of up to $12 million.

Unlike so many other deals in the biotech sector, the partnership won’t see Altria gain any ownership over Lexaria itself. Instead, the company will receive minority ownership of the Lexaria Nicotine subsidiary, with the option to increase its stake in that company through multiple phased private financings. Lexaria retains its independence while benefiting from the money that big tobacco can provide. Critically, Lexaria’s shares have not been diluted by this fresh source of finance.

In addition to a minority stake in Lexaria Nicotine, Altria has received a license to use DehydraTECH technology in oral nicotine delivery products, on an exclusive basis in the United States and a nonexclusive basis elsewhere in the world. This will provide Lexaria with a new revenue stream, as it is slated to receive royalties for any DehydraTECH products Altria launches. The impact on Lexaria’s financial statements of a Fortune 500-derived royalty stream could be significant.

Tobacco companies are eagerly searching for alternatives to traditional cigarettes, to reduce their damaging impact on health and the reputational damage this brings. These factors give Altria a strong motive to develop products using DehydraTECH, providing profits for Lexaria and demonstrating the potential of DehydraTECH to other interested parties.

Starting with a $1 million stake might seem small compared with other big headline deals. But by gaining Altria’s buy in without selling any part of its main company, Lexaria has struck a profitable balance between raising finance and retaining its independence. It’s a unique transaction that other cannabis companies haven’t been able to achieve.

Applying the Technology

Though this recently announced deal is about tobacco, Lexaria’s attention is very much on the cannabis market.

There are three main routes for the active ingredients in cannabis to enter the body — by inhalation, by being placed under the tongue, and by being eaten. Each has its own drawbacks. Inhalation has the highest level of bioavailability, or how much of the chemical is absorbed, but is harmful to the consumer’s lungs. Consumption by under-the-tongue methods has a moderate level of bioavailability but an unpleasant taste. Eating cannabis products has a low level of bioavailability, giving consumers a low bang for their bucks, plus flavor challenges usually met through the addition of large amounts of sugar.

DehydraTECH transforms the situation by seriously reducing the downsides of eating cannabis.

The technology involves combining active ingredients with fatty acids such as those found in sunflower oil, which provide a protective bond, with a patented dehydration process. The molecules within the fatty acids are believed to keep active ingredients away from bitter taste receptors, significantly reducing their unpleasant flavor, thus vastly reducing the need to disguise them with sugar. Low-calorie edibles that taste great are possible!

Fatty acids also help active ingredients in cannabis as they pass through the digestive system. They protect cannabinoids from damage while passing through the stomach, increase the extent to which they’re absorbed by the intestines and can even bypass the liver’s first attempts to filter them out. This leads to much higher absorption, significantly increasing their bioavailability.

This process makes cannabis edibles, which are already healthier than smoking the drug, far more appealing and better value for money. This has led to deals such as Lexaria’s licensing of DehydraTECH to Nuka for use in its cannabis-infused chocolates.

To make the most of this potential, Lexaria has created subsidiaries specializing in the use of DehydraTECH for cannabis. Lexaria CanPharm Corporation focuses on the cannabis market, providing DehydraTECH and other enhancements to the global cannabis industry. The company is in discussions to license its technology in Canada, the United States, and Europe.

Lexaria Hemp Corporation. operates within the related hemp industry, which works with a specific form of cannabis that is low in psychoactive THC but potentially rich in other active ingredients. Lexaria Hemp is in discussions with a number of companies about how its products is used to deliver cannabidiol (CBD) derived from hemp.

With a groundbreaking technology, a carefully developed corporate structure and now a new Fortune 500 source of funding, Lexaria appears to be in a strong position within the cannabis industry.

A Crop of Cannabis Companies

The dramatic growth of legal cannabis in recent years has created a range of important companies focused on the sector.

Like Lexaria, Canopy Growth Corporation (NYSE: CGC) (TSX: WEED) has had success in attracting finance from bigger players outside the cannabis sector. The company has received $4 billion in investment from an American beverage company, which has bought a significant stake in the core company. This will help to finance the development of cannabis-infused drinks and is seen as part of a wider trend, as tobacco and cannabis companies look to vary their product lines while health concerns constrict their sales.

The expansion of the cannabis market has seen a string of investments and purchases within the sector. Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB), one of the big players in Canada, recently signed a letter of intent to acquire Whistler Medical Marijuana Corporation in a deal valued at $175 million. This will give Aurora control of a well-established organic cannabis brand, increasing its market appeal.

Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) has, like Lexaria, drawn investment from Altria, in the amount of CA$2.4 billion. In this case, the funds have come in exchange for shares in the core company, giving Altria a great deal of influence at Cronos. Cronos already does business in North America, Latin America, Europe, Australia and Israel, so this will provide Altria with a way into global cannabis markets, as the spread of legalization expands cannabis markets around the world.

Other companies, such as GW Pharmaceuticals Plc (NASDAQ: GWPH) (OTC: GWPRF), are strongly oriented towards the use of cannabis for medical purposes. As well as selling strains of medical cannabis, GW has been carrying out research to develop medicines based on it. The company recently saw positive results from the second round of trials of an oral solution created to tackle Dravet syndrome, a severe and hard-to-manage form of epilepsy.

With more money coming in from big-value companies and new technology in development, the cannabis industry looks set for a bright year.

For more information on Lexaria Bioscience Corp., visit Lexaria Bioscience Corp. (CSE: LXX) (OTCQX: LXRP)

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New Laws Set Up US Cannabis Industry for Explosive Growth

CannabisNewsWire Editorial Coverage: The 2018 U.S. Farm Bill changes the way that CBD-based products are legally classified. If the federal government permits the sale of cannabis-sourced products online, established companies in the space could reap huge rewards.

The legalization of cannabis in Canada and some U.S. States has demonstrated the latent demand for cannabis-based products.
CBD is used to make numerous products and its potential uses are growing.
Research suggests that the market for CBD products could grow to an estimated $22 billion over the next four years.

SinglePoint Inc. (OTCQB: SING) (SING Profile) is in a good position to take full advantage of the changes in how CBD products are regulated. Major producers such as Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON), Aphria Inc. (NYSE: APHA) (TSX: APHA), Medical Marijuana Inc. (OTC: MJNA) and OrganiGram Holdings Inc. (OTCQX: OGRMF) (TSX.V: OGI) are also well-placed to expand into the CBD space, but they may have to compete with a new class of growers.

There are more than 80 kinds of psychoactive compounds found in the cannabis plant. While most people are familiar with THC, which is used recreationally, CBD has shown promise in treating everything from insomnia to serious neurological disorders. The 2018 Farm Bill leaves THC-based products under the jurisdiction of the Drug Enforcement Agency (DEA) but gives jurisdiction of CBD-based products to the individual states. Most industry experts predict that the popularity of these products will explode as they become easily available due to the new regulations.

To view an infographic of this editorial, click here.

A Waiting Market

Until now, CBD-based products were subject to federal regulations, which made them impossible to distribute nationally. They have been sold on a statewide basis in areas that allowed their use, but anyone who dealt with these products was shut out of the federal banking system because the crop — and its subsequent products — were categorized as illegal at a federal level.

With the signing of the new legislation, that appears likely to change. SinglePoint (OTCQB: SING) is an established distributor of CBD products and owns a decade-old web domain. Not only does the company have experience with marketing and distributing CBD-based products, it also has a background in payments processing.

CBD-based products are a new, largely unfamiliar area that may pose challenges for new companies entering the space. Universal standards for many CBD products have yet to be established or identified, so having a positive market image will likely be a significant benefit. Established companies with an existing client base and a positive reputation may be in a better position to leverage growth in the CBD sector. SinglePoint seems to fit this criteria well.

Wide-Open Potential

There is a big difference between cannabis grown for medicinal use and hemp that can now be used as a feedstock for CBD in the United States. Major cannabis producers have a much higher cost of production than hemp growers. With new changes that the 2018 Farm Bill creates for hemp farmers, the price of CBD may fall substantially.

Instead of being cultivated in near-laboratory conditions, industrial hemp is grown like any other commercial crop. Now that CBD can be refined out of commercially produced hemp, it will be difficult for anyone but U.S. hemp farmers to compete on price when it comes to CBD.

Additionally, the 2018 Farm Bill normalizes the CBD economy at a federal level. For the first time, hemp growers can use the banking system, insure their crops, and even sell their future hemp production via futures. Like any new market, it will take time for the infrastructure to be developed, but early movers in the space may have a significant advantage.

Big Changes for CBD

SinglePoint is in a unique position in the emerging CBD space. As both an online marketer and payments processor, the company looks to be in a strong position to help deliver CBD products to their target markets. The company has a strong strategy to grow its presence in the CBD space. Unlike many of the other publicly traded, cannabis-focused companies, SinglePoint has no connection with cannabis plants and cultivation, so the company should be able to take full advantage of the recently passed 2018 Farm Bill.

It appears that there is no shortage of potential CBD-based products. Currently, CBD is integrated into everything from lotions and edibles to beer and oil. With the legalization of CBD widely anticipated, research will almost certainly lead to additional discoveries into CBD properties and benefits, as well as the creation of new products targeting specific market segments.

The emerging CBD economy is also supported by the ability for hemp producers to raise funds publicly. Much like the Canadian cannabis producers that were able to expand quickly because of their publicly traded equities, U.S. hemp producers can now go public and leverage public interest in CBD to expand their operations.

Changing Production Profiles

The 2018 Farm Bill is a huge positive for U.S.-based hemp producers and CBD consumers.

One of the largest publicly traded cannabis producers available to U.S. investors, Cronos Group (NASDAQ: CRON) (TSX: CRON) owns two fully licensed cannabis producers in Canada and has other interests spread around the world. The company has maintained a multibillion-dollar valuation, despite some weakness in the publicly traded cannabis sector. In addition to producing cannabis in Canada, the company is involved in the distribution of cannabis products in many of the markets in which it operates. In the third quarter last year, the company reported increased revenues by 186 percent and sold 213 percent more kilos of cannabis than in the same time a year earlier.

Aphria (NYSE: APHA) (TSX: APHA) has grown its presence in the Canadian cannabis space via acquisitions and strategic investments and is one of the largest publicly traded cannabis producers. The company made two high-profile acquisitions last year, taking over Broken Coast Cannabis and buying Nuuvera, a Canadian cannabis company with already-existing strategic exposure to German and Italian markets. The vast majority of the company’s production capacity for cannabis is concentrated in a single facility, called Aphria One, which is located in Leamington, Ontario.

Medical Marijuana (OTC: MJNA) has been operating in the legal cannabis space for longer than most. The company owns numerous subsidiaries, including HempMeds, Kannalife and Kannaway. It also operates an international division, which has developed a substantial presence in Brazil, where it was the first company to introduce legal cannabis-based medicines to the Brazilian market. The company also has a direct marketing structure for cannabis products and appears to be well-placed to grow in the emerging CBD market.

OrganiGram Holdings (OTCQX: OGRMF) (TSX.V: OGI) is the parent company of Organigram Inc., one of the largest licensed producers of cannabis in Canada. The company delivers industry-leading yields from its growing facilities and is focused on expanding in the Canadian market for recreational and medicinal cannabis. Organigram developed a portfolio of brands for a variety of uses, including The Edison Cannabis Company, Ankr Organics, Trailer Blazer and Trailer Park Buds. In addition to growing cannabis, OrganiGram also distributes it.

With the passage of the 2018 Farm Bill changing the legal status of CBD, it is estimated that the CBD market will grow to be a $22 billion industry by 2022. SinglePoint has created a solid platform to be a part of that industry.

For more information on SinglePoint, visit SinglePoint Inc. (OTCQB: SING)

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US President, Producers Envision ‘Green Acres’ with Signing of Historic Hemp-Legalizing Farm Bill

CannabisNewsWire Editorial Coverage: Moments prior to signing a historic 2018 Farm Bill and effectively legalizing industrial hemp, President Donald Trump tweeted out a video of his performance at the 2005 Emmy Awards, singing the song “Green Acres.” Having already passed through the House of Representatives and the Senate, the bill was met with much fanfare across nearly the entire cannabis sector, including benefactors such as Green Growth Brands (CSE: GGB) (OTCQB: GGBXF) (GGB Profile), Cronos Group, Inc. (NASDAQ: CRON) (TSX: CRON), Canopy Growth Corporation (NYSE: CGC) (TSX: WEED), Harvest Health and Recreation (CSE: HARV) and MedMen Enterprises Inc. (CSE: MMEN) (OTC: MMNFF).

To view an infographic of this editorial, click here.

Trump’s signature was the last hurdle for the $867 billion bill. Now the market is gearing up for the massive potential of hemp-derived cannabinoids hitting stores. Among the benefactors of the passage is Green Growth Brands (CSE: GGB) (OTCQB: GGBXF), whose goal it is to become the leading retailer of cannabis and CBD products in North America. Under its Seventh Sense brand, the company is about to market its own line of hemp-derived cannabidiol (CBD) personal care products.

Back in September 2018, the market research firm Brightfield Group published a 2018 market overview and analysis on hemp-derived CBD. Among the observations made in the report was the possibility that the CBD market could eclipse the cannabis market. Less than three months after the report’s release, the Farm Bill’s passage significantly improved this possibility.

According to the Brightfield Group’s analysis, the CBD market is expected to annually grow by 147 percent, from $591 million in 2018 to an estimated $22 billion by 2022.

A ‘Monumental Policy Shift’

Upon the passing of the bill on December 20, 2018, the cannabis retail innovators at Green Growth Brands saw the timing as nearly perfect for their company. Having passed just ahead of the launch of its hemp-derived CBD personal care product line under the Seventh Sense brand, Green Growth Brands announced its goal to become North America’s leading retailer of cannabis and CBD products.

“The new bill is a significant step in America’s acceptance of CBD and the benefits it can provide consumers,” said Peter Horvath, CEO of Green Growth Brands, in the company’s corresponding press release. “This development dramatically accelerates our ability to grow our North American retail network. This piece of legislation provides clarity on how we can build out our operations and logistics, reassures those investing with us in this new, exciting industry and gets us closer to the ultimate goal of giving customers high-quality, CBD-infused personal care products at affordable prices.”

According to an AMA (Ask Me Anything) interview, Horvath expressed his excitement over the company’s current selling of test quantities of the Seventh Sense CBD brand in a couple of national retailers’ stores already. “The selling is surprisingly good for products in the personal care category, exceeding our sell-through expectations,” said Horvath. “These are products never before seen, in a brand that’s totally new, and without any marketing.”

Green Growth Brands expects to roll out bulk orders for the product in 2019 and will announce the wholesale partners it is working with when appropriate. Already the expectation is for the launch of a web store and CBD kiosks, which Horvath deems are a “category killer,” in February 2019.

The company expects to derive up to 39 percent of its annual revenues from the CBD segment in 2019, with the potential for that figure to rise to 43 percent by 2021. Current company estimates place the dollar figure of the annual revenue from this segment at roughly $59 million for fiscal year 2019.

Due to Green Growth Brand’s overwhelming amount of c-level retail sector experience, Horvath and his team have a healthy degree of authority on their expectations. The company roll call includes expertise from several household names, including Victoria’s Secret, Designer Shoe Warehouse, American Eagle Outfitters, Bath & Body Works and more.

Branding is a quintessential aspect of Green Growth Brands’ future success. The team’s strategy is focused around being the best brand, coming from what it calls an “emotional brand” perspective. The company has an array of brands — including Camp, Meri+Jayne, Seventh Sense and Green Lily — all of which will be utilized for both CBD and cannabis purposes.

To move its CBD products to market, the company will have three separate strategies: wholesale, e-commerce and kiosks. The latter strategy is an indication of Horvath and his team’s extensive retail knowledge, as they work to grow their brand. Kiosks help to reduce leasing costs for retail exposure while selling brand-specific emotional brands at a relatively inexpensive price. One executive on the team had significant success with this strategy as a former executive of Sunglasses Hut.

By the end of 2019, Horvath’s company expects to have approximately 1,400 SKUs on the market. Should it reach this goal, Green Growth Brands would have a strong case for dominating the CBD products market. The timely passing of the 2018 Farm Bill may only serve to speed up the process.

Additional Benefactors of the Hemp Bill

Prior to the final signing of the Farm Bill, Canadian cannabis company Cronos Group, Inc. (NASDAQ: CRON) (TSX: CRON) grabbed headlines by entering into a subscription agreement with tobacco company Altria Group, Inc. Altria agreed to make an equity investment in Cronos of approximately $2.4 billion. The strategic partnership provides Cronos Group with additional financial resources, product development and commercialization capabilities. Cronos is one of the few Canadian producers listed on a major U.S. exchange, while not having any current operations in the country.

Another company that’s been keeping its eye on U.S. regulatory changes is Canopy Growth Corporation (NYSE: CGC) (TSX: WEED). The company wasted no time in commending the passing of the Farm Bill by announcing that “Canopy Growth will participate in the American market now that there is a clear federally permissible path to the market. Consistent with the spirit of the Farm Bill, Canopy Growth will participate in ways that support American farmers.” Canopy already has a deep hemp-specific portfolio of intellectual property through a previous acquisition of Colorado-based ebbu, Inc. In addition, much speculation has surrounded the potential for the company’s ongoing partnership with Constellation Brands to develop new cannabinoid-infused products, which will likely include a line (or multiple lines) of CBD drinks.

Following the closing of a reverse takeover of RockBridge Resources, Inc., vertically integrated Harvest Health & Recreation (CSE: HARV) announced the acquisition of Colorado-based CBx Enterprises, a producer of cannabis products and technologies for extraction and processing. Harvest’s footprint spans across 10 states, including California, Colorado and Massachusetts. The company reported revenue of $29 million in 2017 and has made $18 million in investments resulting in 40 permits and licenses across the United States. Having focused its attention solely in the United States, Harvest has no immediate plans for international expansion. With each regulation change in the Farm Bill, the company’s fortune appears to look brighter.

However, the Farm Bill’s passing may not please companies solely focused on the dispensary side of the sector. After already going through a rigorous process to be licensed in the states that it operates in, groups such as MedMen Enterprises, Inc. (CSE: MMEN) (OTCQX: MMNFF) gained exclusivity to carry and sell legalized cannabis products. Upon hemp-derived CBD becoming legal and available, the door to more open competition in the space could open widely. MedMen doesn’t seem to be fazed by the passing, having recently announced the finalization of the acquisition of Chicago-based PharmaCann, one of the largest medical cannabis providers in the United States, with ten retail stores and three production facilities across multiple states.

Whether or not federal legalization is in the cards for the United States is up in the air. However, the unfettering of CBD could be seen as the first step. Now with the anti-cannabis stance of former Attorney General Jeff Sessions out of the way, the path to legalization starts to get a little bit clearer. With the majority of Americans, including Republicans, now in favor of legalization and a bevy of CBD-infused products on the way, the days of cannabis prohibition may be on their way out. With a soon-to-be-launched line of hemp-derived cannabidiol (CBD) personal care products, Green Growth Brands is poised to enter the potential billion-dollar CBD market opened up by the Farm Bill’s passage.

For more information on Green Growth Brands, visit Green Growth Brands (CSE: GGB) (OTCQB: GGBXF). Please also visit PotStockNews.com.

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California Cannabis Market Offers Growth for Cultivation Suppliers as Authorities Tackle Licensing Backlog

CannabisNewsWire Editorial Coverage: Growth in the Californian cannabis industry, currently restricted by licensing delays, is expected to accelerate over the coming months, bringing profits for suppliers of cultivation equipment.

California is one of the largest recreational cannabis markets in the world.
Recent delays in issuing cannabis licenses in California seem to be approaching an end.
Outside California, the growing global reach of the cannabis industry is drawing interest from significant international investors.

Sugarmade, Inc. (OTC: SGMD) (SGMD Profile) is one of the companies set to profit from this acceleration, thanks to its sales of hydroponic equipment to cannabis cultivators. Tilray, Inc. (NASDAQ: TLRY) is looking forward to a presence in Latin America after recently establishing a subsidiary in Chile. Canopy Growth Corp. (NYSE: CGC) (TSX: WEED) has drawn billions of dollars in investment from a beverage giant, while Cronos Group, Inc. (NASDAQ: CRON) (TSX: CRON) has benefited from a similar move from big tobacco as those industries’ big names look to get involved in cannabis. Meanwhile, Aphria (NYSE: APHA) (TSX: APHA) is expanding its reach beyond North America through an acquisition in Germany.

To view an infographic of this editorial, click here.

California’s Pot Power

When California passed the Adult Use of Marijuana Act in November 2016, the legislation sent waves through the American cannabis industry. The legalization of recreational cannabis in the most populous U.S. state offered the potential for a huge and lucrative market. The first U.S. state to legalize medical cannabis, California had been near the forefront of the cannabis industry for more than 20 years.

With an estimated population of nearly 40 million people and an electorate that had voted by a 57 percent majority in favor of legalization, California clearly has huge potential for the industry. Not only cannabis growers and retailers but also the companies supporting and supplying them are set to benefit from the change. Recreational cannabis sales became legal in January 2018, and businesses have moved to make the most of the new market. Licensing has caused delays for many companies, but if authorities can tackle the backlog, there’s potential for an enormously influential industry to spring up.

Cultivation Operations

The cannabis industry doesn’t operate in isolation. Companies such as Sugarmade, Inc. (OTC: SGMD), which has become established in other industries, are now moving into this field.

Sugarmade is a product and brand marketing company that invests in products and brands with disruptive potential. Building upon experience in food, restaurant supplies and packaging, it has recently made two big moves in the cannabis sector. These are natural moves for companies aiming to expand their customer base in consumable products, applying existing skills and experience to a relatively new market, and the approach appears to be working well for the company.

Sugarmade’s most recent move in hemp is the investment of $1 million in Hempistry Inc., a Nevada corporation catering to the growing demand for the pharmacologically active CBD component of hemp. The investment is a bold move that comes just as hemp cultivation is on the verge of federal legalization.

Hydroponic equipment is vital to the cannabis industry. It allows producers to cultivate plants in secure, tightly controlled indoor facilities where they can ensure the product is healthy and its potency is appropriate to their market. Without the hydroponics industry, there is no cannabis industry; thus, the rise of cannabis has been hydroponics’ gain.

As a large hydroponics company whose reach includes its ZenHydro brand, Sugarmade could become a leading supplier to California’s cannabis industry. As companies expand to serve the growing market and new companies emerge alongside them, they will depend on cultivation supplies, and Sugarmade is forecasting accelerating revenue growth as a result.

Licensing Issues

Currently, the biggest obstacle to this growth is the ability of California authorities to license cannabis cultivation applicants.

As with any drug requiring a doctor’s prescription, cannabis should be properly regulated. California’s laws include provisions for this, requiring commercial growers to apply for cultivation licenses to operate within the state. However, because federal law still prohibits the cannabis industry, it is difficult for cannabis companies to operate across state lines. Therefore, those aiming to sell cannabis in California will need to grow the crop within the geographic bounds of the market.

Companies applying to grow cannabis in California have encountered a fluid response over the past few months. Recreational legalization encouraged a rush of license applications as approved medical cannabis companies sought the ability to supply the new market and entrepreneurs sought to seize their own piece of the pie. This inevitably put a strain on the system, as happens after any big change. Applications started piling up. According to state licensing agency CalCannabis, an estimated 2,547 cultivation licenses were under review by the beginning of November, with little sign that the backlog was moving.

This slow movement has delayed expansion for the whole industry, including hydroponics suppliers such as Sugarmade. Without a license, the equipment to grow cannabis is of no use to a dedicated cultivator. A lack of licenses deters investment in the associated hardware and supplies. Until the industry is fully up and running, the consumer market won’t have time to fully expand.

Light at the End of the Tunnel

Fortunately, the problems appear to be nearing an end, spurred on by a crisis point.

Around 6,000 licenses have been issued on a temporary basis, with 1,054 of them about to expire. Given the further disruption to the industry that problem could cause, authorities seem to be speeding up their efforts to tackle the backlog. The licensing agency has started issuing annual permits, and industry insiders expect this process to accelerate over the next few weeks. More licenses will mean more companies cultivating cannabis, which will mean more purchases from cultivation suppliers such as Sugarmade.

Jimmy Chan, the CEO of Sugarmade, said: “Our customers, especially those in Santa Barbara, Monterey and Humbolt counties, the three most prolific cultivation areas in California, are indicating to us they too are expecting the permitting process to break free shortly, and they are thus informing us of their plans to accelerate purchasing. We believe this will add to our already strong expected growth rate. We are seeing the cultivation market increasingly shift to the larger commercial growers and we view these operators as our prime markets. We believe, especially considering the recently announced acquisition of Sky Unlimited, LLC, which focuses primarily on these large cultivation operators, we are optimally positioned to meet this expected wave of purchasing of cultivation supplies.”

The Bigger Cannabis Picture

California’s huge potential and brief licensing crisis are only small details in the much bigger picture of the global cannabis industry.

Tilray, Inc. (NASDAQ: TLRY) is a pioneer in the cultivation, production and distribution of cannabis and cannabis-derived chemicals, as well as in research to improve understanding of them. Through affiliates in Canada, Australia, New Zealand, Germany and Portugal, Tilray operates across multiple continents, engaging with researchers, doctors and consumers. It recently made a move into Latin America through its new subsidiary Tilray Latin America SpA. Licensed by the Chilean government to produce medical cannabis, Tilray is using Chile as a base to prepare for sales into other Latin American markets, as local laws allow.

One of the most important trends in the cannabis industry is the increasing interest outside companies exhibit in getting involved. Alcohol and tobacco companies have been sniffing around the big players of cannabis, which are relative small fry by comparison and therefore can easily be given a proportionately significant boost. The best-known example is Constellation Brands’ investment of $4 billion in Canopy Growth Corp. (NYSE: CGC) (TSX: WEED), showing Constellation’s interest in the future of the cannabis market. The involvement of big alcohol and tobacco companies, with their experience in lobbying and public relations for recreational drugs, will put more momentum behind the global move towards legalization.

Like Tilray, Cronos Group, Inc. (NASDAQ: CRON) (TSX: CRON) is making the most of the growing global market for cannabis, doing business in North America, Latin America, Europe, Australia and Israel. The company has recently secured C$2.4 billion in investment from Altria Group, the owners of Phillip Morris USA. A move in line with Constellation’s investment in Canopy Growth, this will see a strengthening of ties between big tobacco and cannabis. As tobacco companies see their profits hit by anti-smoking campaigns, cannabis offers a promising alternative, and their presence provides a promising source of finance for cannabis.

Aphria (NYSE: APHA) (TSX: APHA), another North American company with investments in Latin America, has recently announced a move to strengthen its presence in Europe through the acquisition of CC Pharma. CC Pharma is a leading distributor of pharmaceuticals to Germany pharmacies that will provide Aphria with a useful channel to get its products onto German shelves.

The cannabis market is becoming a truly global one, with sales on nearly every continent and investment from huge multinationals. Even so, some regions remain particularly crucial, and an accelerated pace of licensing in California will bring huge benefits to the industry.

For more information on Sugarmade, visit Sugarmade, Inc. (OTC: SGMD)

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